A few weeks past initial release, and it's nearly official: Star Wars: The Rise of Skywalker will enter the $1 billion global box office club. If the final chapter in the Skywalker family drama cost about the same to produce as the previous installments -- somewhere in the $250 million to $300 million range -- that means Lucasfilm and parent Disney (DIS -0.93%) have another big hit on their hands.
Or do they? Just as the last episode, Star Wars: The Last Jedi, was released with some controversy, so was The Rise of Skywalker. Though a film that grosses $1 billion in sales is a success for anyone else, expectations are always ratcheted up for a Disney production, let alone something carrying the Star Wars name. The film continues to rake in receipts from moviegoers (a total global box office of $928 million through Jan. 8, according to Box Office Mojo), but at its current pace, it will fall well short of The Force Awakens' $2.07 billion take and be more in line with (or even less than) The Last Jedi's $1.33 billion haul.
The rub? Where The Last Jedi received warm reviews from critics but a less than glowing reception from many die-hard fans (I loved it, and there's debate as to how many actually hated it, as the film was subjected to quite a bit of online trolling), The Rise of Skywalker opted for fan service and has been panned by many critics and received mixed reviews from the more casual Star Wars audience. Lucasfilm can't seem to get the fanboy service/quality film-making formula right, and it's leaving large swaths of the movie-going public underwhelmed. That means it's also leaving lots of money on the table.
Why $1.3 billion falls short of expectations
But why would a $1.3 billion box office performance be disappointing? For one, bear in mind that those are gross receipts, not profits. Star Wars movies are expensive to make, and there are also advertising budgets, distribution costs, etc. beyond the $250 million to $300 million production bill. So $1.3 billion in sales likely leaves far less wiggle room than one might think.
Second, it also points to the Star Wars franchise being in decline. Typically, a trilogy's conclusion brings in more ticket sales than the middle installment, as fans flock to theaters to find out how the story ends. It's looking increasingly likely that The Rise of Skywalker won't accomplish that. Interest in the franchise overall seems to be flagging, too, as 2018's Solo: A Star Wars Story brought in a meager $393 million worldwide. Under Disney's purview, Lucasfilm has released five Star Wars films, and the numbers seem to be trending down with time. Comparatively, the opposite is happening with Disney's other sci-fi blockbuster generator Marvel Studios, with Avengers: Endgame holding the record for biggest box office of all time.
Reasons for The Rise of Skywalker's mixed reviews are varied. While the film did cram in a bunch of material to answer questions and resolve other fan complaints, the story came across as busy and not well-developed to the casual viewer. As a trilogy overall, the plot also appears to suffer from a lack of direction. And that's ultimately why ticket sales are probably suffering. Star Wars and Lucasfilm are now public concerns that carried a $4 billion price tag when Mickey and friends acquired it back in 2012. Massive budgets to deliver the pandering demand of every individual superfan at the expense of general audiences need not (and should not) be the formula going forward.
You can do it, Lucasfilm
Not all is lost. The Mandalorian is proof that the Star Wars universe can still deliver, as the Disney+ streaming service tentpole at least in part helped fuel the gain of 10 million subscribers on launch day. Even better for the longevity of the internet-based TV platform is that the show was warmly received by everyone -- critics, fans, and the more casual TV watcher alike. According to the website Rotten Tomatoes, the live-action Star Wars show has a 94% approval rating from critics and a 93% audience score.
As a sci-fi franchise, potential stories and plots are wide open. My appeal to Disney as a shareholder, a Star Wars fan from childhood, and a general cinema enthusiast: Please focus on creativity and quality filmmaking above all else. No more recycling of old plots, no more reliance on what was great 40 years ago, and please no more blowing up planets. Making a quality production with a fresh take on the franchise should be the new Star Wars focus. It may not please everyone, but creativity and new ways of viewing the world is what movie-making is all about. Accomplish this, and new fans and dollars will follow suit for this consumer discretionary stock.